Mindanao railway project up for NEDA review

The government is evaluating anew the Mindanao Railway project to update costs and potential ridership, with the possibility of shifting financing mode to include the private sector, instead of purely loans.

The Department of Transportation (DOTr) said there is a need to review the detailed engineering design of the project and given the delay, it might have to go back to the National Economic and Development Authority (NEDA) for updating.

“Since we will update the feasibility study, we will have to again look at the numbers and if the cost is more than 10 percent, we will need to go back to NEDA,” Transportation Secretary Jaime Bautista said.

“We will also need to look at the ridership because the alignment is almost similar to the existing highway,” he said.

The project has no funding source after the Department of Finance (DOF) pulled out the country’s request for official development assistance (ODA) from China for the P83-billion Mindanao Railway Phase 1 last October 2023.

Bautista said the DOTr would immediately start updating the feasibility study and targets to finish it within the year.

The Transportation chief also expressed confidence that NEDA will work on it fast and issue the approval as needed before turning over to the DOF for the funding source.

Finance Secretary Ralph Recto said there are many ways to procure the project apart from ODA.

Recto said public-private partnership (PPP) could be one, especially with the PPP Code.

“We are just awaiting the updated feasibility study of the project then we can discuss the best way to procure the project,” Recto added.

For Transportation Undersecretary for railways Jeremy Regino, the Mindanao railway can be implemented via hybrid financing.

According to Regino, the right-of-way acquisition can be done by the DOTr, electro mechanics via ODA and the civil works can be transferred to the private sector.

“That will make the project more viable because the ridership of Mindanao rail is not as high as in Metro Manila,” Regino said.